US technology companies are in the midst of a wave of layoffs. Oracle, a company aiming to expand into cloud technology, has just laid off thousands of employees.

Block, a well-known name in digital payments, is cutting more than 4,000 jobs, nearly half of its workforce.

Amazon and Meta are shrinking. From 2022 to 2025, these tech firms and five other giants in this field hardly increased the number of employees at all.

Total employment, both in and out of technology, in San Francisco, the world's tech capital, has fallen by 3% since the beginning of 2023.

According to the way executives present it, this is not because the industry is struggling. Rather, it is because the sector is in the midst of a generational boom, thanks to Artificial Intelligence (AI).

Its supporters argue that AI is becoming too skilled, too fast, at the very kind of work that many tech workers do, even in a frightening way, as the latest Anthropic model shows. Humans are becoming redundant.

Fears of an AI-driven tech job apocalypse have spread beyond Silicon Valley. In America, tech's share of overall employment has fallen from a peak of 2.5% in late 2022 to 2.3% today.

More than 500 tech jobs are “missing,” compared to previous trends. Some subindustries have shrunk faster. “Internet search portals and all other information services” employ 7% fewer people than in December 2022.

High earners, many of them tech people, think more disruption is coming. The richest 10% are more worried than ever about jobs.

We have collected comparable data on technology employment in the US, Australia, the UK, Canada, France, Japan and Norway. These include companies in software development, programming and cloud computing.

Tech employment grew significantly in the years leading up to 2022. In November of that year, OpenAI released ChatGPT to the public, ushering in the age of AI. Since then, tech’s share of overall employment has stagnated or declined. Surely this is no coincidence?
It could be. For economists studying the impact of AI on the labor market, the launch of ChatGPT is a convenient starting point. But it's also misleading.

The first AI tools were primitive.

Only since Anthropic's February 2025 release of Claude Code, an AI assistant, has the idea that an AI tool could replace a software engineer become somewhat credible.

Until recent months, when Claude Code has taken over tech firms, any slowdown in recruitment could hardly be attributed much to AI.

AI enthusiasts, excited by these tools, also overestimate their popularity and, consequently, their macroeconomic effects. The U.S. Census Bureau estimates that only about 25% of firms in the San Francisco area use AI regularly as part of their daily operations.

Across America, usage is much lower. And usage doesn't necessarily mean job displacement.

A recent survey of firms in America, Australia, Britain and Germany, by Ivan Yotzov of the Bank of England and his colleagues, finds that over the past three years, AI has had zero impact on employment.

History is another reason to pause. You might think that as economies become more dependent on technology, the increasing share of technology in total employment is an iron law of nature. Yet for most of the 2000s, that share in America, Australia, Britain, and Canada barely budged.

Even in 2006-07, when the rich world was inflating a financial bubble, tech employment was weak. AI was not to blame.

Then, what hindered employment growth was the bursting of the dotcom bubble in 2000. After that spectacular burst, many technology firms gradually ran out of money and were forced to close.

But by the middle of the decade, other factors had come into play. To save money, companies shifted more tasks to Information Technology (IT) companies, such as Tata Consultancy Services and India's Infosys.

Also, interest rates in America began to rise in late 2004. Higher borrowing costs discouraged businesses from investing in software and computer hardware, reducing the demand for people to install and manage them.

The current state of tech people seems eerily similar. Many firms went on a hiring spree during the Covid-19 pandemic, when locked-down consumers were ravenous for all things digital.

In 2022, interest rates began to rise rapidly, as central banks realized that pandemic-related inflation was not a seasonal blip but something more chronic; in 2023, the growth of business investment in IT slowed significantly.

Firms have once again turned to offshoring services to save costs. From 2021 to 2024, U.S. imports of services related to cloud computing and data storage more than doubled.

Why hire someone with a high salary in America, when you can get the same service from Bangalore for a quarter of the price?

development

A less visible development is also having an impact. While many tech businesses have frozen hiring, other industries are coveting employees with tech skills.

Data by occupation in America, which sees people describing themselves as "software developers" and so on, suggests a strong demand for technology workers.

Today, 3.7% of people have technology-related occupations, up from 3.6% in November 2022.

A new study by Leland Crane and Paul Soto of the Federal Reserve suggests that the pace of growth in the ranks of programmers in companies has slowed after the introduction of ChatGPT, but is still growing.

Even outside the AI ​​economy, retailers, banks, manufacturers and others who still account for the majority of jobs in the rich world are hoping that AI can enable a single technician to do more work.

But many of these firms employ few tech people, which still leaves a lot of demand for tech skills.

From 2022 to 2025, the number of American workers in computers and software grew by 12% in retail trade, 75% in real estate, and nearly 100% in construction.

Tech jobs aren't disappearing. They're just spreading across the economy. Once upon a time, the path to riches was through Google or Meta. Now, a young programmer can apply to work at Starbucks, not as a barista./Monitor